tv The Kudlow Report CNBC April 15, 2010 7:00pm-8:00pm EDT
♪ he's a communist living in the white house ♪ ♪ there's a communist, everybody, in the white house ♪ ♪ there's a communist living in the white house ♪ ♪ there's a communist living in the white house ♪ >> what are we going to do about it? >> reporter: now, leave aside that wacky rhetoric from victoria jackson, a former "saturday night live" cast member. you've got a lot of the tea party protesters who were expressing in stronger language some of the mainstream concerns about taxes, spending and the role of government in particular in the era of the bailout nation. they make the argument that everybody except them is getting bailouts. >> you figure the amount of money he's taken off of everybody, all these taxes that they're talking about, it's like how much am i going to have to spend after he gets his? these the thing. he gets his before i get mine. everybody gets theirs before i get mine. your unions get their money before you get yours.
>> reporter: now, who are the tea party people? "the new york times" and cbs news took a look at what this movement is comprised of. it's about 18% of the american people who say they're part of this movement disproportionately male, white, older and interestingly, larry, high income. you have about 20% of the members of the tea party movement saying they make more than $100,000. and it's going to be very interesting to watch over the next few months as we get into 2011 especially as to whether economic recovery in the stock market and other economic indicators take some of the steam out of this movement. hadn't happened yet, larry. >> yeah. you know, i still believe -- i just wrote a column on this, john. i think the big message here is anti-spending and i think the idea of constitutional limits to government and government spending is really one of the embedded messages in the tea parties. i don't know if the political class in washington will get that message or not, but we will see. john harwood, thank you very much for helping us this evening. now let's turn to some other big news out of washington,
which is ending too big to fail. senate majority leader harry reid hopes to begin debating the financial regulatory reform bill on the senate floor next week. joining us now is really the man of the moment, chairman of the senate banking committee, connecticut democratic senator chris dodd. mr. dodd, welcome back to the kudlow report , sir. >> good to be with you. thank you for your eloquence on this issue. you've been terrific on it. >> gosh, gee whiz, i hate to say it as an old reagan supply side conservative, i've kind of been with you. i read the committee print and read your fact sheets. it may not be perfect but i certainly believe you've been in the right direction the whole time. i want to read for our viewers -- i read your whole statement on the floor today and your colloquy. let me read this briefly. you say the bill stops bailouts by forcing firms to write their own funeral plans and to pay for their own liquidation in advance so the taxpayers don't have to pay a dime for it and they
shouldn't. and if that hasn't been enough, our bill stops bailout by literally eliminating any possibility for the government of the u.s. to bail these firms out. it's very clear and strong language, sir. some of the republicans don't buy it. tell me some more. >> i don't know why. in fact, several of them helped me write it. we've been at this for the last couple of months. one thing we've all agreed on. there have been differences in dealing with derivatives and consumer protection and various other parts of this bill but there was nothing but commonality and purpose to end once and for all too big to fail. never again implicit guarantee that the federal government will put your chestnuts out of a fire when you get in trouble as these institutions did. and we had that massive investment of taxpayer money to stabilize the economy. i never want to see another congress and another taxpayer ever have to face that. so we have writ then in a way that, one, limits the possibility of that happening by requiring higher capital
standards, liquidity standards for these larger institutions that may start to pose some systemic risks. then if they do get themselves in trouble, then they have topping through liquidation. they're in bankruptcy. they have to pay a price. creditors do as well. you're in receivership. there's no such thing as being in a situation where the taxpayer provides a nickel to you. that white horse that rode in to save those corporations, those financial institutions, that white horse is dead. it no longer exists in our bill. >> all right. looflt the controversy i guess is around the $50 billion tax assessment. sheila bair wrote a response to peter walisson's arlt can in "the wall street journal." he says $50 billion -- this proves somehow or other that you all are going to bail out banks. let me read you what ms. bair said. she said the proposed resolution fund will not protect any class of creditors but is designed solely to provide liquidity and
to maximize the val uft failed firm's assets to allow an orderly liquidation of the institutions. creditors will bear losses. i kind of looked at that in my own simple way, sir, as kind of a debtor in possession liquidity to get him through the bankruptcy process, not a bailout. you tell me this is the big sticking point apparently with some of the people on the other side. >> ironically, larry, the provision was suggested by republicans on the bill. when we originally included it in the bill, there was some debate back and forth. and i wanted to make sure that this was going to be used exactly as you described it for one purpose only. otherwise you go into liquidation, you're going in to taxpayers to ask them to pay for liquidation. why should we ask the taxpayer to do that? we do this with the fdic in a different way. we assess banks so if they end up in trouble we apply insurance of depositors in a way.
banks juchunderstand this. in this case we say if you ever end up in that situation you're the ones that's going to pay for this. don't ask the american taxpayer to do it. that's the reason it's there. i'm somewhat befuddled that people are suggesting this is somehow a hidden fund that guarantees we'll provide a bailout for these institutions. nothing could be further from the truth. >> one of the issues, in talking to republican staff and so forth -- one of the issues that comes up -- i'll get your comment on this. there is concern that the $50 billion might be used to bail out what they call preferred creditors. that's a legitimate issue. maybe the language has to be tightened. i don't know. i hadn't been down there in many years at that level. but preferred creditors, what can you say about them? >> listen, again -- nothing is written here in marble or concrete. if there's something in here that raises any legitimate question about what our intentions are, give me the idea. let's have an amendment. i'll put it in the bill. we'll shut it down. i don't want anyone to have any illusionings about where i am on
this issue and where i think my colleagues are both democrats and republicans -- i ge get a feeling people are sort of using this as a sort of subterfuge because they really don't want to debate the other issues which are more controversial in the bill because frankly they're hard to attack. they're talking about too big to fail. whatever needs to be done to make this clear even with preferred creditors ought to be done to eliminate any doubt whatsoever that we should ever ask a taxpayer to come in and provide the kind of support that these institutions received in the fall of 2008. >> that's an extremely important statement in my view and thank you for it because you are open to amendments. you pretty much run an open process here. >> beginning last february, i insisted that the treasury department and any meeting they had with me that republican staff be at every meeting. we started last fall and i divided up my committee. i assigned democrats and republicans to work on derivatives and consumer protection, work on too big to fail so they were vested in the process.
that went on for weeks and took a lot of changes, created a lot of changes in our bill. that door is still open. i'm still hopeful we can end up with a bipartisan bill. i'm not desirous of having some partisan bickering highly divided institution on this issue. but i can't let this go on forever. we've been at it for months. we need to come to closure. my hope is the next few days we will. >> my own take is this. it's awfully hard for even the best regulators to keep up with the clever traders on wall street and at the end of the day, sir, the too big to fail ending -- in other words, you screw up, you're going down. >> right. >> -- is the greatest sanction of all. it's the best free market legislation of all, which is where you're going. let me ask another one which i heard from some of the republican staff. they are concerned that beyond the $50 billion that you all could go -- you, the fed, whoever is going to be the regulators on this -- could go to the treasury for additional funds and that that would be a back-door bailout. any thought on that? >> no, they can't. the only way they can --
certainly not the treasury. no individual company can get any assistance whatsoever. we shut that down under this bill. the language is very specific on this as well. again, if people think there's some vague door here that may exist, tell me about it. we'll shut it down. >> so, again, you are open to these amendments and i think that's a very important statement. i thank you for it. let me move on. one area that does get a lot of conservative criticism is building a new consumer finance protection agency from the beginning right up. people talk i think legitimately -- the bureaucracy, the expenses, the interference and so forth. will that thing be put inside the fed? will it be linked to the banker, the bank regulatory supervision, there be adult supervision for the consumer financial protection agency? you know what i'm talking about. >> we were told you and i all along the institutions were safe and sound. ? why? because they were profitable and making money.
what we have learned they were anything but safe and sound because you had brokers luring people in, people going into mortgages they couldn't afford, adjustable rate mortgages with a fully indexed price. all of those problems. then run around drafting individual pieces of legislation to deal with financial products that consumers need to be better aware of, conscious of thousand had he work. the idea is -- more has been made of this. this is a place where consumers which are so critical in our financial structures, they have to have confidence in our system. when they lose confidence in the system -- and you saw what happened with the credit card fees and the interest rates and so forth that frankly would have been -- you would have gone to jail for charging them a few years ago. putting small businesses out of business and the like. we need a place where that can be resolved. now, we write it in such a way so if there is some conflict between the safety and soundness regulation from a prudential regulation and comment with a consumer protection regulation we set up a panel where those charges can be brought and by a vote determine whether or not that occurs.
so i've tried to protect the only regulatory body in the united states that would have an appeals process with a group of regulators. we tried to build safeguards for those who raise issues. it has independence, a rulemaking authority. we don't have them examining or doing other things with small banks under $10 billion. so it's only the larger institutions. it does cover nonbanks, financial institutions that have had no regulators in the past. but this is a fairly common saenls proch in this day and age so we don't have to have congress trying to draft bills all the time to legitimately protect consumers where they're being disadvantaged. >> last one, sir. a lot of people want to know will government stop pressure for lenders to make unaffordable mortgages, plus the disposition of fannie and freddie, which look to be taxpayer bailouts in perpetuity. >> one of the ways we do this -- i've always felt strongly it's beyond the pay grade and
competence of congress to write accounting standards or regulations. that's not our business. we don't do that well at all. in this case the legitimate issue is a lot of the instruments now particularly mortgages where there wasn't a down payment or the examination of people's ability to pay -- what we do is require skin in the game. and nothing helps better than skin in the game. so if you're a broker and you're a bank and you've got to have skin in the game, you're going to be demanding more out of that borrower than otherwise where you are paid and out of the deal in days or weeks selling off those bundled securities many of which were worth almost nothing to the investor. i think that protects exactly what you're talking about. >> just to conclude on this -- we appreciate your time so much. ending too big to fail would be one of the most transforming pieces of legislation i think in history, sir. >> yep. >> you are open to some amendments that would tweak the language on some of these issues of creditors and what is not. >> >> you bet. >> senator chris dodd, we really appreciate your time.
>> thank you, larry. >> my pleasure. coming up on kudlow report , you think you pay too much in taxes. that's only half the story. the center for freedom and prosperity produced this video making rounds on the internet showing how just doing taxes is a giant waste of time and money. we're going to break down the cost of tax compliance with the star of that clip when we come back. and you heard senator dodd. he is open to amendments to create an end, an absolute end to too big to fail. and i think he means it. you're watching cnbc. it's monday,
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language but i don't know how he could be clearer that he desires to end too big to fail and that that in fact is the intent and that's where that bill is going. so he's open to republican amendments. i think that was really the key point. we're also going to do the whole tax day problem in just a minute. but i can't help myself because we had very strong economic numbers today. i want to update pu. a very strong industrial production and philly fed manufacturing report and even stronger new york fed empire state report. this is an update on the v-shaped recovery before we hit the tax wall or whatever is going to come next year. from the industrial production report, manufactured production, the "v" continues. i think manufacturing was up 0.9%, 10% annual rate of the last three months. the philly fed index, it may not be booming quite as much but the "v" is here and the philly fed index on an ism basis came in
very, very strong. the new york fed empire, that one really was strong today and you get the same "v." whoops. "v" down and not "v" up. my drawing skills have to be improved. all i'm going to say because we have a lot of ground to cover having just done senator dodd on too big to fail. now on tax day and how to scrap the code and improvement. the v-shaped recovery continues. the stock market gained ground today. now the question is can we keep it up in the future or hit a tax wall in 2011 and maybe beyond. the center for freedom and prosperity has produced a youtube video. it outlines the staggering costs in time and money that we all spend complying with this outrageously complicated tax code every year. here now to break it all down for us is the student featured in the video. an economic student at the college of william and mary.
she is a former cato institute intern. i hope i pronounced your name reasonably close. thank you for coming on the show. you wrote a brilliant article here on this youtube thing. what is up with these compliance costs? this may be the single worst part of the tax code. >> thank you for having me on the show, larry. i don't know if i would agree that it's the worst part of the tax code because i think our tax code has a tochb problems but it's definitely very alarming. the tax code -- just complying with the tax code this year is going to cost us $338 billion estimates the tax foundation. the irs themselves admit that it's going to take about 7.6 million hours for americans to figure out just how to file their taxes. this is a huge waste of resources for us. >> $338 billion, 7.6 mm man-hours. do you think hiwa we could spend that money more wisely and
productively to create wealth and jobs? >> absolutely. this is just a huge waste of resources. and the important thing to note here is that this isn't the fauflt the irs. it's the fault of the politicians for having such a bad tax code. >> this is because what? they write in all these special preferences, subsidies, credits, deductions, exemptions. it's kind of a "k" street lobbying political effort. is that what you're driving at? >> absolutely. and it's just cause for tax reform. there's studies that a a flat t would reduce compliance costs by 94%. that's the direction in which we should be moving. >> so what about fixing this thing? is it fixable? spols i could devise a system that could get rid of this complexity? is such a thing possible or do i need to scrap the code and start over again? >> i think we need to scrap the code and enact a new policy, a new tax code that is flat where
income is taxed one time and there are no special loopholes. >> do you think this is the single thing americans hate most about it, that they have to spend so much time -- i mean turbo tax, then you have to go to accountants to interpret turbo tax. all the hours and money you spent wasted. to me, this is probably -- i know the level of tax rate is probably too high federal, state and local. that's the easy one but i think this is the part that americans hate most. >> absolutely and rightfully so. it's a huge waste of resources. it's a huge waste of time and money. >> now you are down there at william and mary college. i cannot resist my wife, my bride of 23 years is a graduate of william and mary college. so when you make this argument down there in class, how are the professors? understand what you're talking about or have you already passed them? >> i don't know that i would say that i've passed any of my professors. but i do not currently take any classes that heavily focus on
tax code. i'll put it like that. >> so what are you going to do next year when you graduate? >> i don't know yet actually. i'm currently looking for jobs. >> what are you going to do? you want to be a tax analyst, economist, go to graduate school, run for office, be a tea party. >> i want to join the fight for liberty. >> i like that. hiwa. i think i got that right. college of william and mary, former intern to our great friend dan mitchell. the complexity $338 billion of wasted money a year, 7.6 million hours. what a waste. thank you. coming up, can america truly maximize its future to grow under the current tax system and future tax threat? i'm going to ask house members paul ryan and billy pascal when we come back. a senior at william and mary has
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don't know who is speaking. we'll talk to lou dobbs later in the program because he will be speaking there and also talk to dick armey who will be speaking at washington. get their takes and what their messages are. let's continue our discussion of the tax day and why the code has to be scrapped. we heard young hiwa tell us that the compliance costs are too great. our question is can america truly maximize its future to grow under the current tax system? that includes replacing 8.5 million new jobs and creating a boat load of still newer jobs. joining us is new jersey democratic congressman bill pascral and paul ryan. mr. pa scal is on the ways and means community. paul ryan, i'll start with you. can we maximize our potential to go replace the lost jobs and create new ones under the current tax code including the tax hike scheduled for the next few years? >> why, no, larry, we can't. we should tax income once, never
again. get rid of the double and multiple layers of taxation on capital. we're in a global economy now. capital moves all over the place. we should have a tax code designed to gain maximum economic growth and job creation. not a tool for social engineering. not a tool for redistribution. it should be a tool for growth. >> mr. pascral, good to see you. if you fleece the rich, which is what's going to happen in 2011 as the top earners face higher tax rates, capital gains and dividends. you fleece the so-called rich, purr damaging the nonrich and you are damaging people looking for jobs because, bill, without capital and investment and saving there is no way we can create jobs in this economy. >> i agree with the last part of your statement and i disagree with the beginning of your statement. look, we have had trickledown economics. it's not worked. you know that in the past 16
years the middle class has seen their wages stagnant. and while a concerted effort has been made to make sure that the most wealthy people in this country -- that is 1.5% of all of the earners in this country have been basically earning much more than they started out with 10, 15 years ago. this goes across party lines, larry. paul, i have a great deal of respect for him. he's a very thoughtful individual. but we need to look at this all the way. what we're attaching -- taxing in assets 20 years ago, what we were taxing in income, there is no question that we needed change in the code. there's no question about it. you've heard in the ways and means committee, paul, the sentiment on both sides of the aisle to really simplify the code, to change the code to lower some rates, to even lower corporate rates. i think you have sentiment on both sides to do that. and the last administration had eight years and they did nothing. in fact, they added more pages to the tax code.
you know that an know that. >> i want to put a chart up. we have a chart of the history of u.s. tax rates going back to the very inception, which was 1913 and ultimately the passage of the 16th amendment. we'll put that chart up on the full screen. you can see that. let's look at that. the top rate started at 7%. that was back in 1913. then during world war i is jumped up to 77%. during harding, coolidge, it dropped down to 25%. then during the depression years it rose all the way up to 94%. it was john f. kennedy who cut it to 70%. reagan got it back to 28% and it's been drifting that that 30% to 40% range now for 15 years or so. paul ryan, do you agree with bill pascel that the middle class has suffered? >> i like bill pascrell.
i just don't agree with him. i have a bill that gets us to the cattle vin coolidge tax rates. whether it was jack kennedy or ronald reagan, lower taxes helps. lower tax rates. it's really simple. you tax something more, you get less of it. you tax something less, you get more of it. tax labor, capital, savings investment more you get less especially in this 21st century global economy. the ways and means committee which bill and i serve on has been a really busy committee since this new administration joined forces with the democratic majority $670 billion have been enacted into law. >> i want to ask. you heard paul's response. >> yes, i did. >> what i don't understand is the idea of taxing capital and saving and investment. you yourself told me there at the end of that first question that you agree you can't create jobs without capital. >> no question about it. >> why would you want to raise the tax on capital gains and
dividends and inheritance next year? why, why, why? >> in fact we joined in lowering some capital gains taxes but we're not going to do that across the board because some of it is not fair. look, we had a massive tax cut last year february. that's an average in the united states of america $1500 per family. in new jersey, it was very, very successful. 97% got some benefit from some of those tax cuts. it cost $270 billion. we had tax cuts in 2001 and 2003, larry and paul, that we didn't pay for. it added to the deficit. so you could cut taxes. you can reduce the revenue that's going into the federal government. and if you don't pay for it, you wind up in a jam. and we wound up in a big jam in 2007 and 2008. >> there's a big difference here. what bill is talking about were the keynesian rebate tax cuts that passed last year. >> the biggest tax cuts -- >> rebates. >> for two years -- in 40 years.
>> two years and 40 years? >> that's right. >> i haven't run the numbers on that but the point i'm simply trying to make is -- >> trust me. >> the income effect. okay. i'll trust you for argument's sake. what is one-time rebates many of which went to nontaxpayers do not lower the rate of taxation. >> what do you mean by nontaxpayers? >> people without tax liabilities. we had the eic. it's scored in the congress as an outlay. so if we're scoring it here as spending, then that's what it is, spending. that's not republicans saying it. that's the joint committee on taxation. the point i'm making if you can let me is tax rate re duckses. growth occurs on the margin. lowering the rates gives an incentive for more economic activity for prosperity. and remember when we're raising these tax rates we're raising the goose that laid the golden egg from small businesses. 70% of the jobs come from small businesses. when you raise tax rates you're punishing small business and investment and savings.
that hurts job creation. given a one-time pop and one-time rebate might manipulate a gdp in one or two quarters but does not lay the foundation for economic growth and job creation. >> i'm glad you're talking about jobs because that's very, very important. we've seen a very large turnaround since january of 2009 in the number of jobs we have lost in this country. and we're about to see a plus finally. we've got a long way to go but we've turned it around. if you want to look at graphs, take a look at that graph. i think that's very, very, very important. i also think putting money in people's pockets is very important. for instance, the middle class. i don't believe the wealthiest people in our country, that 1.5% deserve to have a huge tax cut on the thought that somehow that's going to create jobs in america. it certainly didn't happen in the eight years that bush was the president. >> just in a simple liquidity sense if you tax the top end earners you're pulling money out
that will never be used for investment and means you're stopping people from getting a job because without a business to create the job, without a business, you can't have -- you can't have investment without the business. all i'm saying is all you're doing is draining investment liquidity out of economy. putting aside the incentive effects which i believe in but even in the cash flow sense why do it? these are not bad people. the entrepreneurs create the great businesses that hire tens of thousands of jobs. we're never going to -- >> we tried trickle down. it doesn't work. let's have fairness. we don't need trickledown. >> fairness and class wear he warfare make for great politics but bad economics. >> paul ryan, what about government spending trickledown because i'm still recovering from this brookings ijs constitution report that said even to get the deficit 3% of gdp in the light of all this massive government spending we'd have to raise the top tax rates to, what, 80%? >> yes.
>> okay. now, isn't spending in some sense the root of all evil here? >> it is of course. the spending that's occurred in this congress alone is $1.8 trillion in new spending above the baseline that is not passed into law. so $670 billion in new taxes this year. this session $1.8 trillion in new spending. so we are on a spending spree here in congress. it's not getting anywhere close to the deficit. dubltion the debt in five years. you know the feds will hit the brakes next year. it will be an ugly season in 2011. i think we'll have good growth in 2010. bill is right the economy is picking up steam. les he let's not smothder it with all the tax rate increases and all the spending. >> we're not going to snuff out growth. there's no question about it. you know that the middle class got it in the neck. you know wages have been stagnant and it's unfair to you -- if we take -- >> so we should raise tax rates. >> don't take it out of context.
look at the facts what's happened over the last 20 years and all of the stratospheres of our economy from the top to the bottom. you know -- that's why republicans now support earned income tax credit and should have changed -- >> bill pascrell you're one of my favorites but your own governor chris christie. >> he's in big trouble. >> she's slashing spending left and right and it is wildly popular. the tea parties are out there with hundreds of rallies across the country. >> until they -- >> constitutional boycott against big government spending, bill. you're running against the whole political tide, my friend. >> larry, larry -- well sometimes you have to do those things. but let me tell you something. communities, the suburban communities are finding out that their properties taxes are going to go up because of the very cuts that this governor made.
>> he's going to put a cap on that too. >> he's going to try to do that. >> when are you going to put a cap on spending, my friend? when are you going to cap spending in the congress? >> he's told people to vote against their board of education budgets. it's very easy to lay off people. and it's very easy to shut down programs in schools. and since you brought the subject up -- >> yes. >> it's very easy to do those things but people are hurting. they go on unemployment. that costs a lot of money. these things don't just fall out of the sky. i'm not saying that mr. christie, the governor, is wrong. he's had a tough deck of cards that was given to him. he had a bad hand. and he's got to deal with it. that's the past two governors. but you don't do it in one swoop of the pen. it's not going to happen that way. >> paul ryan, i want to ask you. in one swoop, isn't the real tax burden on the economy government spending? >> yeah. >> isn't that again the root of the problem? >> why didn't you cut it when you were in the majority.
>> hang on a second. the new supply side effect could very well be cutting spending that will help relieve growth and put confidence in the credit markets. >> i have to leave it there. thank you very much. >> thank you. take care. coming up, does big government spending equal huge tax hikes? we're going to go live to the major tea party rallies in washington and new york and see what message is. not only cut spending. we are going to have constitutional limits on spending according to the tea partiers. and i think that's a hell of a good idea. we're going to talk to former house majority leader dick armey and my great pal famed commentator lou dobbs. there's mr. armey now wearing that good looking cowboy hat. we'll be right back. we're going to talk cowboy capitalism, hold back spending, lower tax rates. simplify the code. you know it.
armey. he's the co-chairman of freedom works. with that cowboy hat on, we're waiting for lou dobbs to show up in new york. are you for cowboy capitalism? what does that mean? >> i certainly am. i talked about it. the free market economy carries the government. the government is the jockey. and if a jockey is fatter than the horse you're going to lose the race. these good folks all understand that the real level of spending is in fact the level of taxes. we've got to control spending and we've got to civilize the tax code. and they're quite insistent about it. i think they've just plain had enough of washington trespassing against their liberties and bankrupting their country. >> you know, dick, that's so interesting. the real tax revolt, i think, this year is the revolt against government spending and the government encroachment. >> right. >> it's a freedom message. it's an economic freedom message and also a constitutional message if you read the contract from america.
we had ryan hecker on last night. that's the deal, isn't it? this year it's all about a revolt against spending. >> right. notice ryan hecker is from houston, texas. he's not a big shot. he's an american citizen that got in touch with a lot of other citizens across the internet and they put together this contract from america. and they're saying, look, we're a nation of scarce resources, precious opportunities, a proven track record of success in free markets and private decisions. let the government respect that, honor that, restrain itself and watch america again prosper. >> all right. i think somebody said that our friend lou dobbs has just shown up in the new york city tax rally. >> all right. >> all right, lou. how are you? >> i'm good. how are you? >> great. it's great to see you. thanks for helping us out. one of the things we've been talking about is this year's's rally really a revolt against government spending. do you agree with that?
and what did you tell the folks up there at the rally in new york? >> well, i'm going to tell them later here -- i'm going to talk at the wrap-up of the rally. but, larry, as you can hear there is a lot of enthusiasm. and you're right, this is about a civil disagreement with government that has grown far too large, that's gronl far too ip incompetent and far too indifferent to the interest and values and demand of the american people. this is without question a popular expression of will. it is one that i think we're going to see continue to build from here all across the country. >> all right. please stay right where you are now that we've got both of you. i have to take a quick commercial break. lou, you taught me how to do this many years. dick armey, you know all about it. stay right where we are. we're talking to lou dobbs and dick armey, a spending revolt. i posted a column online today. this is a constitutional limits spending revolt according to the
we are back with lou dobbs and dick armey. i'm assuming they're both there. let's zero in on them on the cameras and get them up on the scoreboard. they're both there. that's terrific. we're sort of high poth sizing, folks, that the real tax revolt this year among the tea partiers -- lou dobbs speaking
in new york, dick armey in washington. this year's tax revolt is a spending revolt. lou dobbs, let me go to you. you are always tax and spend issues still up for grabs? >> i think it's very much up for grabs. as you look around this group of people at this tea party, larry, here in new york, they are no more convinced of the -- shall i say the virtue of the republican party than they are disappointed with the lack of virtue of the democratic party. they know >> no. the republicans may be winning on taxes, but they haven't yet demonstrated that they're repentant and reformed on spending. they need to get there. these folks out here who are going to be the swing vote that decide the election have got to get comfortable with the notion that they can dare to depend upon the republicans to be responsible on spending. they know there's no hope with the democrats, but they're not willing to settle for the republicans as the least worst option. the republican party through its candidates has to demonstrate with confidence to the voters that they're the most best option. when they can get there, they'll take the majority, but not until they win that confidence with a clear show of resolve and commitment and repentance for their errant ways of just a few years ago. >> i like that repent, repent. lou dobbs, if you were president today -- and that time may come. if you were president today, lou dobbs, what would you do?
what would your first fiscal economic act be in office? >> i think that we as a nation, larry -- not just one man, one leader, one woman. we've got to come together and understand that we cannot continue to spend as we are now spending, that we are a nation with limits. we are a nation of responsibility. and we've got to understand we're going to have to con strain entitlements. we're going to have to focus on how to lift this country higher to create wealth and prosperity, not try to create another program that is simply a diffusion and, frankly, a diversion from real solutions. that's got to scare a lot of people but it's really what has to be done. >> lou dobbs, in the fight to stop spending and debt and deficits, can we keep tax rates down? is such a thing possible? >> it's not only possible. it's the only way to create the wealth necessary to drive these
entitlements that we will be able to carry into the future. we cannot tax our way to prosperity. >> right. >> we have to unleash the engine of the most resilient, strongest economy on the face of the planet. and if we get it into our heads that we're going to tax our way forward, we are certain to head backwards. >> last word, dick armey, real quick. is the flat tax alive, dick armey? ten seconds. >> absolutely it's alive. one of the things these folks are saying tonight, we want a civilized tax code. we don't need a code that drives us crazy. and the flat tax gets you there. get inside each. and see what you find. if perfection is what you pursue, this just might change your course. meet the new class of world class. the twenty-ten lacrosse, from buick.
what's he building in there? what the hell is he building in there? >> it had taken enron 16 years to go from about $10 billion of assets to about $65 billion of assets and took them 24 days to go bankrupt. >> what the hell is he building in there? >> this company collapsed so quickly and so entirely, i mean, it was into bankruptcy within a matter of weeks. it just immediately had all the makings of a gigantic scandal. >> he's hiding something from the rest of us. >> the fatal flaw at enron, if there was one, you say it was pride, but then it was
arrogance, intolerance, greed. >> so many of them were blinded by the money that they didn't see that they were sinking their own lifeboat. >> we have a right to know. >> it just got hungrier and hungrier. sooner or later, they were doomed to go off that cliff at 90 miles an hour. >> it's astounding that they got away with it for so long. >> in reality, enron was a house of cards. >> what we didn't know is that the house of cards had been built over a pool of gasoline. >> it all sort of became smoke and mirrors. >> committee will come to order. this is a case of america's largest corporate bankruptcy. the question here is what happened, who was responsible for it happening and what can we do to prevent this sort of thing from happening again. >> i think the enron story is so fascinating because people perceive it as a story that's about numbers, that it's somehow about all these complicated transactions.